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Slashing of expat numbers likely to hit economic growth

Although Kuwait has announced plans to slash expat numbers by 1.5million over the next seven years, this is likely to impact its economic growth, says a new research. According to the research, it will take a generation to substitute the large number of foreign workers with nationals.

Just like the other oil producing Gulf countries, Kuwait has been trying to build a diversified economy, but, it has also decided to favour its national workforce.

The Chief Economist for Indosuez Wealth Management, Dr. Paul Wetterwald, the global wealth management division of Credit Agricole, said that it would be nearly impossible to replace such large number of foreign workers with Kuwaitis in a timescale less than one generation.

This demographic management would surely impact growth, as, the growth is after-all, the combination of population growth and productivity, said Wetterwald in a new research note.

The government plans to limit the number of expats in Kuwait to 25 percent of the population, which implies that at least 600,000 Indians and 300,000 Egyptians would be among those reduced, as they constitute the majority of expat community.

owever, it does not mention about the 120,000 Bedouins, or the reduction in 650,000 domestic helps.

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